Kirsty Blackman: I would go so far as to bet that all Committee Members have not read all the written evidence that has been provided. I bet that they have not had time, given that the customs Bill is running at the same time, and the majority of us who are Front-Benching for that Bill are also Front-Benching for today’s Bill.
The timescale is not working. If we were to allow evidence sessions this Thursday, and then allowed the Public Bill Committee stage to stretch slightly—I am not sure it would even end up stretching as far as 18 January, because we could have a number of sittings before then—that would be a really positive change for the Committee. We would all be better informed, and it would be a good step for scrutiny and transparency, which the Government and the ministerial code suggest that we should have.

Mel Stride: Clauses 3 and 4 set the main, default and savings rates of income tax for 2018-19. The clauses keep the basic higher and additional rates of income tax at the same level as last year. We are also supporting lower and middle earners by increasing the tax-free personal allowance and the point at which people pay the higher rate of tax in line with inflation next year, locking in previous rises and helping hard-working people with the cost of living.
By keeping rates the same while increasing the personal allowance and higher rate threshold, we are delivering on our manifesto commitment to cut taxes for working  people. We are protecting our fair and progressive tax system, in which those who can contribute the most shoulder the greatest burden. The latest figures show that the top 1% of taxpayers contribute nearly 28% of all income tax. We have already cut taxes for 31 million people since 2015 and taken more than 1 million of the lowest-paid out of income tax altogether. We have promised to go even further to increase the personal allowance to £12,500 and the higher rate threshold to £50,000 by 2020.
New clause 10 would require the OBR to analyse the effect of the income tax rates set out in clauses 3 and 4 on incentives into employment. An important part of the OBR’s role is to subject the Government’s policy costings to detailed challenge and scrutiny at each fiscal event. As the Committee would expect, the impact of tax policy changes on employment is an important judgment that the OBR makes when certifying a costing. The OBR sets out its judgments clearly in its publication “Economic and fiscal outlook”. Detailed distributional analysis of the kind requested is not in line with the OBR’s remit to examine and report on the sustainability of the public finances. Extending its remit to include undertaking distributional analysis would risk diverting the OBR from an already challenging task. I therefore urge the Committee to resist new clause 10.

Mel Stride: Clause 5 maintains the starting rate limit for savings income at its current level of £5,000 for 2018-19. As members of the Committee will be aware, the starting rate for savings applies to the taxable savings income of individuals with low earned incomes. The Government made significant changes to the starting rate for savings in 2015, lowering the rate from 10% to 0%, as well as extending the band to which it applies from £2,800 to £5,000. This welcome reform has done much to support savers on low incomes by reducing the tax they pay on the income they receive from their savings. Since then, savers have been further supported by the introduction of the personal savings allowance, which offers up to £1,000 of tax-free savings income.
The changes made by clause 5 will maintain the starting rate limit for savings at its current level of £5,000 for 2018-19 tax year. This change is being made to reflect the significant reforms made to support savers over the last couple of years, in addition to the substantial increases in the personal allowance. Most notably, in April 2016, the Government introduced the personal savings allowance, which will remove 18 million taxpayers from paying tax on their savings income in 2018-19. In April 2017, the annual ISA allowance increased by the largest ever amount, to £20,000.

Mel Stride: Clause 6 makes changes to allow marriage allowance to be claimed and backdated on behalf of deceased spouses and civil partners. Marriage allowance was introduced in 2015. It allows individuals to transfer 10% of their personal allowance to a spouse or civil partner if they are a basic rate taxpayer. Marriage allowance can currently be claimed and backdated by up to four years if taxpayers meet the qualifying condition. Currently, taxpayers cannot claim after a partner is deceased, even if they may have qualified in the current or previous years since its introduction.
I have heard representations from the Low Incomes Tax Reform Group highlighting the fact that it is unfair that this financial support is not available for people going through a period of considerable distress that accompanies the death of a partner. The changes made by clause 6 will put marriage allowance on a footing with other tax reliefs, where claims can be made by a personal representative after death on behalf of the deceased.
As a result, bereaved partners can now claim on behalf of their spouse or civil partner in the current year and any previous years where they were eligible, up to a maximum of four years. That will enable of thousands of extra people to claim the marriage allowance, worth  £230 this year in tax relief, or up to £662 if backdated to its introduction. That will have a negligible cost to the Exchequer.
New clause 3 would include a review in six months’ time of the effects of the costs of the extension of the marriage allowance made by clause 6. It is the Government’s view that there is no need for a formal review of these changes. First, the new clause asks for a review of costs. As I have said, clause 6 is forecast to have a negligible cost, a judgment with which the independent Office for Budget Responsibility was content. Her Majesty’s Revenue and Customs also published the Exchequer cost of the main tax reliefs, including the marriage allowance, on an annual basis. The House will be able to examine the overall change in costs at that time.
Secondly, the new clause calls for a review of the effects of these changes. As the Committee would expect, we keep the effectiveness of the marriage allowance under review. Indeed, the clause was developed in response to concerns raised by the Low Income Tax Reform Group, a sign that the Government are willing to listen when concerns are raised. After six months, it will be too soon to tell how effective the policy has been, so a formal review would be a disproportionate response. I therefore urge the Committee to resist the new clause.
A total of 2.6 million couples have successfully applied for the marriage allowance and thousands more apply each week. That is a tax cut worth more than £400 million to couples on lower incomes. The changes being made by clause 6 mean that thousands more will be able to claim, recognising that bereaved partners going through extremely distressing times deserve all the support that they can get. I therefore commend the clause to the Committee.

Kirsty Blackman: The Scottish National party has a long-documented opposition to the married couples allowance, with which we have disagreed with for a long time. The change the Minister suggests makes it slightly better and gets rid of one of our concerns, but it remains a tax relief that overwhelmingly benefits men. It remains a tax relief that leaves abused women out in the cold. Because they have to hand over part of the personal allowance, it is difficult for them to go back to work in some circumstances.
It remains a change that benefits only traditional nuclear families, whether people are in a civil partnership or are a heterosexual couple. Only those couples who choose to live together as married benefit. When the measure was first introduced, it was made clear that couples with children were less likely to benefit, because of the working structure that tends to exist with those couples. Apparently, only 15% of those who benefit from the scheme are women; it may even be less.
This issue has been raised by the Women’s Budget Group as one that creates further gender disparity in a society where we are trying to reduce the gender pay gap and make matters better by trying to create a situation where women can more easily go back to work and earn a reasonable amount of money.
The married couples allowance is incredibly flawed. Although this change makes it slightly better, it still has a huge number of problems. We will continue to support new clause 3 and press Government to get rid of the married couples allowance.

Mel Stride: The hon. Member for Oxford East raised the issue of whether there will be any detriment, and she specifically mentioned retrospective issues in terms of  this formalisation of the relief that has hitherto been available on an informal basis. I can assure her that there will not be any detriment, and I thank her for raising that important matter. As for seafarers’ pay, that is probably an issue that is out of scope for this Committee, but I am sure she will raising it in other quarters. Part of the reason for introducing this clause, and for formalising and putting into legislation these particular reliefs, is to make sure that we are as effective as we can be on the tax side when recruiting men and women who do such an important job, and that we remain internationally competitive in our tax treatment of their earnings. I hope that the Committee will accept clause 7.